RecommendationsGoldman Sachs reiterated Underperform on FHCC and Outperform on AVP, PXD. Goldman said lodging sector managements had trouble controlling their "glee" on how strong current trends are at their conference yesterday.

Late-Night NewsAsian indices are modestly lower on declines in Japanese bank shares after Goldman Sachs lowered their ratings. Qualcomm, unable to meet demand for its chips, is negotiating with South Korean companies to build semiconductors that go into mobile phones, Electronic Times reported. Oracle has a "really good case" in its trial to stop the Justice Department from blocking the company's purchase of Peoplesoft, CEO Larry Ellison said at a trade show. Beijing may face power blackouts this summer because peak electricity demand is forecast to be 14% higher than a year ago, the Beijing News reported. Clear Channel Communications has agreed to pay an estimated $1.75 million in penalties to settle indecency complaint with the FCC, the NY Times reported. State Street Global Advisors said it expects to get approval this year to set up China's first exchange-traded fund, Bloomberg reported. Japan raised its estimate for first-quarter economic growth to a 6.1% annual pace, above the 5.8% economists expected. Gilead Sciences, CIT Group and Vornado Realty Trust may join the S&P 500 in the next few months as takeovers open at least five spots in the benchmark index, Bloomberg reported.

BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on another fall in energy prices tonight and continuing improvements in Iraq. Japanese GDP growth exceeded expectations as I expected. The Japanese consumer is contributing meaningfully to this recovery, unlike past failed recoveries, which leads me to believe it is sustainable and a very positive development for world economic growth. I will likely cut the Portfolio's market exposure into any market strength tomorrow as I expect Thursday's PPI and jobs numbers to exceed expectations, resulting in another rise in interest rates. The Portfolio is 125% net long heading into tomorrow.

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